Tax Cuts and Jobs Act Impact and Additional Effects on the Construction Industry

The Tax Cuts and Jobs Act (TCJA) is the most sweeping reform we have seen since the Tax Reform Act of 1986. Significant changes have been made to tax rates, which in most cases has been lowered with larger income brackets in place.

In addition, the construction industry has seen a change in deduction options with the loss of DPAD and the implementation of the Qualified Business Income Deduction, also known as Section 199A. The Section 199A deduction gives owners of pass-thru business entities (sole proprietors, partners in partnerships, some real estate investors, and S corporation shareholders) a deduction equal to 20% of their business income. It is a complicated part of the law and consulting your tax professional strongly recommended.